Innovative Retail Technologies

JUL-AUG 2017

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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allows us to identify operational errors and identify integrity issues," he says. "Once we can identify either type of issue, we can take corrective measures." In addition, Five Below can identify issues significantly faster than it could with the manual process. Not surprisingly, the new system immediately uncovered fraud taking place. "Some was from dishonest employees, and some was external," he says. One area identified was individuals purchasing gift cards with fraudulent credit cards. "When I analyzed our chargebacks, most were high-dollar gift cards. Often, we see people trying to buy more than one." Identifying this as a trend, Smith created alerts whereby if a high-dollar gift card was purchased, the district manager was automatically informed. "If one gift card is purchased, it's not a problem, but if we see multiple sales, it's a red flag." Five Below also educated its employees to take extra precautions to ensure the card number, card, and name match the person making the purchase. Smith keeps the exact details of Five Below's gift card fraud reduction process and thresholds to himself, but the end result is a workflow that has nearly eliminated this type of fraud. He adds that the introduction of EMV chip-and-PIN terminals has further reduced fraudulent transactions. In addition, Smith was able to set up transaction alerts. "Anytime an associate rings their own refund or void, an automatic transaction alert goes to the store manager," says Smith. "The managers are Jul -Aug 2017 8 anything happens in a store that needs to be reported to someone else in the company, the tool can be used. "We use it for reporting thefts, receiving the wrong merchandise, handheld devices failing, customer injuries, and so on," he says. Not only does the software make filing reports easier and distributing them to the correct people an automatic process, but it also gave Five Below automated reports that could be used to make additional improvements. "We created customized dashboards for people in the organization," says Smith. "The district manager can see what's happening in their district. The regional managers can see their regions and so on." Smith says the tool can also be used to collect operational self-assessments from the stores. With the click of a mouse, the district manager can log in and see who's completed the assessment. They can also identify commonly missed questions to uncover needs. Weekly conference calls with the stores have become more effective by adding the ability to address these areas of need. In fact, Smith says trends from the reporting led to the ability to create written documentation and awareness materials to reduce problems and improve processes. This ultimately led to the creation of training videos used with new hires. "Having a small team, we can't always send people out to perform live training," says Smith. "When you consider the age of our workforce and how they prefer to learn today, videos make sense." In the spirit of keeping costs to a minimum, Smith's department wrote the scripts for the videos and worked with the training department to shoot the videos themselves. Today, Five Below processes approximately 1,000 incidents per month. Keep in mind, these are company-wide incidents that go beyond LP. The software investment more than pays for itself each month since it's used to help many departments within the organization. Exception Reporting — Fraud Reduction Another project Smith worked on early in his tenure with Five Below concerned exception reporting. As he recalls, the first exception reports he received had to be created by the IT department. "The reports were high level and could let you know that some activity was taking place in a store, but there weren't very actionable specifics in the data," he says. "I had to track down the data, import it into Excel, massage the data, and try to uncover themes and trends." Similar to the incident reports, the process was time-consuming and kept Smith in the office late. However, the laborious process revealed enough activity to warrant investing in a more robust tool. It took Smith a little more than two months to find, select, and implement a tool that delivered to Five Below the analytics and LP reports he desired. There are many benefits to using the software. "Having a robust analytics and LP system

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